Key insights
- McDonald's earnings are expected Thursday, with a potential 3% price swing anticipated. Analysts are watching for insights into the US consumer and the success of value promotions. Revenue is forecasted at $6.47 billion, EPS at $2.74, and same-store sales growth at 3.7%. Despite concerns about the Iran war's impact, Oppenheimer and UBS remain bullish, viewing the recent pullback as a buying opportunity. The report will offer clues about consumer spending trends.
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McDonald's is scheduled to report earnings Thursday morning, with shares seen potentially sinking to their lowest point in nearly two years following the results.
Based on current options pricing, traders are anticipating McDonald (MCD) could move up to 3% by the end of the week. A move of that size from Wednesday's close could see shares rise near $294, recovering some of their recent losses, or slip to $275, their lowest level since August 2024.
McDonald's shares have slipped about 17% since closing at an all-time high of $341 in February amid worries about the impact on its business from the war in Iran. In the U.S., McDonald's has focused on value with deals, as well as plans to attract new higher-income customers. The chain is also reportedly preparing to launch new beverage offerings including energy drinks to draw in customers.
Investors and analysts are likely to look to McDonald's results for insights into the health of the American consumer, and the performance of its recent value-focused promotions.
Oppenheimer analysts wrote recently that they see the stock's recent pullback as a buying opportunity, and that McDonald's has "multiple levers to drive healthier sales, margins, and earnings growth following 2 years of underwhelming results." UBS analysts said they are also bullish on McDonald's long-term outlook, while noting that sentiment around the stock has turned negative amid uncertainty about recent sales trends, and the impact of the Iran war on its international business.
Analyst estimates compiled by Visible Alpha forecast McDonald's will report first-quarter revenue of $6.47 billion, along with adjusted earnings per share of $2.74. The fast food giant is also seen reporting 3.7% growth in same-store sales, with 4% growth in the U.S.
Analysts are largely bullish on McDonald's stock, with seven "buy" and three neutral ratings among the ten analysts with current ratings tracked by Visible Alpha. Their average price target of $350 would suggest analysts see a full revery for the stock to new highs in the next 12 months.
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